MASTER LIMITED PARTNERSHIPS

Thursday, October 02, 2008

Now that everything is open we're down about 3 points on the mlp index with the dow down 170. Alliance Resource Partners (ARLP) is down 1 plus as the leading loser. Williams (WPZ) Natural Resource Partners (NRP) and Kinder Morgan (KMP) among the major fractional losers.

Not many winners this morning and most of those are up just small fractions or unchanged.

7 comments:

Anonymous said...: Good for pipelines, hurts pricing for Nat Gas ( maybe ) in the short term.

Otherwise Armaggedon is being priced in?

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Natural gas production to rise 8% to 35-year high: NGSA

By Polya Lesova
Last update: 10:01 a.m. EDT Oct. 2, 2008
NEW YORK (MarketWatch) -- Average natural gas production this winter is expected to rise by 8% compared with last winter to its highest level in 35 years, the Natural Gas Supply Association (NGSA) said Thursday. "That translates to a downward pressure point on natural gas prices this winter," said Patrick Kuntz, chairman of NGSA, at a press briefing in Washington. NGSA also expects U.S. natural gas demand to rise by 2.4% this winter to 78.5 billion cubic feet per day. NGSA also said that weather, one of the biggest determinants of natural gas demand, will have no upward or downward pressure on the market. NGSA also expects a "healthy level" of natural gas in storage this winter. Commenting on the impact of the credit crisis on the natural gas industry, Kuntz said: "It's hard to dismiss the magnitude of what this country is facing. If prolonged, this kind of a credit crunch can have an impact on drilling, on the industry generally." Natural gas for November delivery was recently trading up 5 cents to $7.78 per million British thermal units on the New York Mercantile Exchange.

http://www.marketwatch.com/news/story/natural-gas-production-rise-8/story.aspx?guid=%7B73DE6082%2D09F1%2D49F9%2DBB7B%2D1BAAB2A1F647%7D&dist=hplatest

---------------------------------; 10/02/2008 10:10 AM
Anonymous said...: WPZ -6% on 19,000 shares. This is fucking pathetic.

I wish these assholes would just stop and think before they sell. This is the dumbest price action in the history of American finance.; 10/02/2008 10:14 AM
Anonymous said...: How could so many people be so foolish? What did hedge funds think when they levered themselves 10 times? What did Lehman think would happen when they levered themselves 40 times? What did the banks think when they wrote "no doc" mortgages?; 10/02/2008 10:19 AM
Anonymous said...: Global equity markets are "uninvestable" right now. There is absolutely no way to game the noise on a daily basis.

I am not buying anything and I really wish I didn't have as much exposure on as I do.

Mr. Majestyk; 10/02/2008 10:30 AM
Anonymous said...: Regarding WPZ, it is just idiots reacting to old news. If they bothered to do any reasearch they would have seen the following:

Williams, based in Tulsa, Okla., said Monday that Discovery's offshore gathering system was damaged and would be shut down for repairs for at least 30 days. It said Discovery is covered under standard property damage and business interruption insurance, and under federal rules can recover some costs related to natural disasters including property damage insurance deductibles.

So the storm will cost WPZ nothing...But we all know in the current environment all news is a reason to sell...; 10/02/2008 10:34 AM
Anonymous said...: Hedge funds were a vehicle for institutuions to avoid margin requirements, and the consequences of leverage,

An institution can only lose their investment in a hedge fund, on 10x leverage you can lose a lot more than your investment.

Lehman figured they had always survive, as they always had.

Pualson and Bernanke, thought Lehman was not too big to fail and P+B let them fail.

Now we are finding out that Lehman was too big to fail.

As to the banks with no doc loans, they figured when they sold the paper... it wouldn't be their problem anymoore.

When the history books are written, the tipping point that made this crisis inevitable was sometime in 2005 when most legitimate home buyers had already bought, and only a pool of unqualified remained.

The real estate industry, Wall Street, Many Banks + Mortgage Brokers, RE-Appraisers, and Rating Agencies, Chose to accept these unqualified buyers as legitimate, when were not. Why? So that everyone can stay on the gravy train for a little longer.
The Markit site show some prices of crummy assets, some of these prices have gone up in anticipation of Paulson buying.

http://www.markit.com/information/products/category/indices/abx.html

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Most of us, (me included) believed
in the MLP structure and history so strongly that we felt Macro issues would have little influence in price. Few expected that lower fed funds rate wouldn't support higher MLP valuation.

After all people still will want to heat their house in the winter, and they need electricity to cool their house in the summer, Energy companies found that MLPs were a method to extract the most from assets they wished to sell.

For the conservative MLP investor the MLP structure is a Dream come true... you get a generous distribution... and a 5% annual growth to that distribution.

That dream doesn't seem as good now as it did 16 months ago.

Going forward, after this mess, stock prices are likely to be lower,

Financing costs (if available ) higher, and perhaps energy companies that wish to spin of sssets to MLPs will have to use purchase money mortgages.

HS; 10/02/2008 11:02 AM
Anonymous said...: Alan Reynolds of the Cato institute on Bloomberg radio ( not vebatum ) said that Paulson's clumsy actions killing shareholder equity
with AIG and others brought this crisis to an accute phase.

HS

BTW that is my view as well.; 10/02/2008 11:15 AM